Wealth of Nations December 2006

On Milton Friedman's Unfinished Work

Despite Milton Friedman's best efforts, economic liberty is widely regarded as very much a second-class kind of freedom.
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My previous column had closed and gone to press when I heard that Milton Friedman had died. I hesitate to add to the many excellent admiring articles that appeared in the following few days—by now there cannot be much else to say—but please indulge me. I could not forgive myself for letting the event pass without adding my own words of appreciation, however inadequate or superfluous.

Friedman was the formative intellectual influence of my life. I started out loathing the man (or what I thought he stood for) and ended up idolizing him. As a schoolboy I was aware of his reputation as the leading apologist for evil capitalism, supreme academic commander of the enemy forces. And not much changed in that when I first began to study economics properly, reading Friedman for the first time and having to acknowledge that he was a brilliant scholar. None of that disturbed my militant leveling instincts.

Economics was one thing, "political economy" quite another. Friedman could have been right or wrong about monetary-base control, or about consumption and saving, or about the nonaccelerating inflation rate of unemployment, and so forth, without those views implying much, one way or the other, about capitalism and socialism as rival systems of organization. In other words, it was possible to recognize, grudgingly of course, Friedman's brilliance as a pure and applied economist, while putting his larger views about society to one side. And that is what I did.

If I recall correctly, what first unsettled me at this deeper level was watching a recording of a televised debate between Friedman and John Kenneth Galbraith on the respective roles of state and market. In those days I admired Galbraith, had read all of his books, and reveled in his every wise pronouncement about the deficiencies of Western capitalism and the unacknowledged virtues of Soviet central planning. I remember excitedly tuning in to this program, avid to see all that superior understanding, human empathy, and magisterial disdain pour down on poor old Friedman's head. Well, Friedman quietly, courteously, and good-humouredly tore Galbraith to shreds—or so it seemed to me.

Being a lethal debater—which Friedman certainly was; nobody else came close—does not make you right. But after this encounter I was more receptive to Friedman's broader economic philosophy. I admit, I still took a while to come around: Even when I read Capitalism and Freedom (Friedman's best book, in my view), it didn't so much change my mind as open it. It took a few more years, and a job in government, to complete my education and convince me that Friedman had been right all along about the main thing—right to argue that, when it comes to advancing social welfare, free markets are capable of very much more, and governments very much less, than is almost universally supposed.

Much of what is wrong with popular attitudes to capitalism comes down to one thing: a lack of wonder at what uncoordinated markets can achieve. Going to a grocery store for the hundredth or thousandth time is a pretty humdrum experience. As a rule it isn't going to elicit much of an intellectual response—though if it does, the response might be one of two kinds. The commentator Robert Kuttner once wrote of his dismay at the great number of breakfast cereals on offer in his local grocery. What a waste, was his point; who could possibly need all these different cereals? Can't we arrange things more intelligently? This is a leftist kind of response: "Put somebody sensible in charge and plan things better." The liberal response (in the proper sense of "liberal") is different: "How amazing that all these choices are available, so that every taste is catered to, and it's all so cheap."

In his best-seller Free to Choose, a more popular version of Capitalism and Freedom, and in the television series of the same name that Friedman did for PBS, this necessary sense of wonder is often at the fore. In one memorable segment, talking straight to the camera, he explains how the pencil he's holding is itself a small miracle of spontaneous economic cooperation. Governments struggle to do the simplest things competently. In so many instances, markets do impossibly complex things—yet so smoothly and efficiently that we do not even notice. And when we do notice, it is usually to complain. (You can watch the clip of Friedman and the pencil on YouTube: www.youtube.com/watch?v=dbRcmKRv-zo.)

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